Sustainable Investing

Cheap, abundant electricity is critically important to the AI race and national competitiveness. We take stock of energy supply and security across the US, China, and Europe.

Policy has shifted to prioritize energy security and industrial competitiveness over climate leadership. This will steer investment to the most economical energy sources, driving continued growth in renewables and fossil fuels—but slower decarbonization.

The unprecedented pace of government action on climate looks unlikely to continue, as voters and policy makers grapple with the economic trade-offs.

The vast majority of publicly traded companies have announced plans to reduce carbon emissions, but many commitments are not sufficiently ambitious or credible—particularly in high-emitting sectors. As a result, investors may be unknowingly exposed to transition risk without a rigorous process to assess these plans.

Head of Sustainability Research Daniel Hochman, Dartmouth Class of 2011, joins Dartmouth’s Tuck Energy Currents podcast to discuss Bridgewater’s research on the primary factors driving the transition to a low carbon economy and to offer advice for young professionals looking to enter the sustainability space. See important disclosures and other information here.

Bridgewater co-CIO Karen Karniol-Tambour joined a panel discussion at a Global Energy Summit hosted in New York City. Karen shared her and Bridgewater’s insights on how the changing economic landscape affects funding for the green energy transition, how policy makers can support that transition, and how U.S. competition with China is driving the Western transition.

Head of Sustainability Research Daniel Hochman and Senior Researcher Jeremy Ng explore how achieving the world’s ambitious climate goals will require rapidly scaling economically viable technologies, while also innovating, incentivizing, and investing in less mature technologies that are not yet cost-competitive.

Head of Sustainability Research Daniel Hochman joins the “Sustainability Shapers” podcast to discuss the intersection of sustainability, markets, and economies, highlighting the important role investors play in shaping a low-carbon economy. The conversation also covers Daniel’s own Bridgewater journey and the importance of creative thinking to understand the world’s most challenging complexities today. Please see here for important disclosures and other information.

Bridgewater founder Ray Dalio shares his reflections from COP28 and his perspective on climate finance.

How the net zero transition plays out—and the speed at which it occurs—will have major implications for corporate capex, commodities, and economies and markets more broadly. One lens into how this transition is unfolding is the state of bank-to-corporate green financing, which is not happening at a rate consistent with global net zero goals.

The world is still a long way from hitting its emissions targets, but the process of decarbonization is underway, and climate policies in major economies have a large and growing impact on spending, capital flows, and portfolios.

The publicly traded firms in a handful of emissions-intensive sectors are responsible for about 60% of all global emissions. By allocating capital to climate solutions and carbon improvers in these sectors, investors can make progress toward their net zero goals, even if that leads to higher spot portfolio emissions than if they were to cut these emissions-intensive sectors altogether.

Greenhouse gas emissions are highly concentrated in a few key sectors in investor portfolios; the publicly traded firms in these sectors alone are responsible for about 60% of all global emissions. Investors thinking through climate risks, climate opportunities, and net zero alignment should focus on these sectors.

The transition to green energy will be an increasingly important driver of economies and markets. In this research, we stress test the impact on investor portfolios of four broad mechanisms that could accelerate the climate transition.